I don't think that it is a coincidence that the failure happenned outside the area between the house foundation anf the wall. Assuming that the house has some crawl space or basement, the surcharge on the wall from the soil between would be less than if it were continous soil.
I agree with the number of people who suggest that it makes more sense to talk to a structural engineer rather than unknown sources with unknown experience on the internet. You at least need to shift the liability of this to someone else. The proper someone is a structural engineer.